Industry profile - cosmetics industry
Emerging Themes – Mr Muyaka
INDUSTRY PROFILE – THE COSMETICS INDUSTRY
The Cosmetics Industry, also known as the “Beauty Industry” has gone through dramatic changes in the last 20 years. In the last two decades, the global Cosmetics Industry has shown growth of 4.5% a year on average. This stable and continuous growth shows resilience even in negative economic conditions. The Cosmetics Industry was affected by the 2009 recession but recovered in 2010 as the global economy improved. The Cosmetics Industry is divided into five segments; namely Skincare, Hair care, Make-up (colour), Fragrance and Toiletries. All these segments are different but complementary and are therefore able to meet all customer beauty needs. The above beauty segments can also be further sub-divided into premium and mass production segments, according to the brand prestige, price and distribution channels used. Globally, the mass segment represents 72% of total sales and the premium segment represents 28%. The United States, Japan and France account for the majority of the sales of premium cosmetics (Barbalova, 2011) Geographically, the Cosmetics Industry is divided into dominating (high global revenue) and peripheral (small global revenue) areas. Dominating geographic regions are North America, Latin America, Asia-Pacific and Western Europe. Since 2000, the cosmetics markets of Brazil, Russia, India and China (BRIC countries) have shown significant growth. The beauty and personal care markets there have expanded and have thus contributed significantly to the growth of the global market on the whole. In 2010, the BRIC countries accounted for 21% of the global beauty industry and their share is set to increase to 25% of the total market value in 2015 (Lennard 2011). Presently, most major international cosmetics manufacturers are focusing on expanding their presence in the BRICs. The BRIC countries are the main force within the emerging markets.